Should every generation have to "start over"?

[Valmy]

I am pretty sure the Americans have their fair share of ways to avoid the tax.

Trying to fool the IRS is a dangerous game.  They can destroy you in many nefarious ways.

[Ideologue]

I started to post something similar to grumbles early on but apparently the US, unlike Canada, does tax gifts.

So if you are rich enough, you just go to Canada or wherever and take care of it that way.  Only the middle classes would have their estates taxed.  You know, like how most of this stuff tends to go.

I find it very odd, the ingrained notion that rich people can avoid taxes regardless of the will of the U.S. government to tax them.

If we can kill Osama bin Laden in Pakistan or blow up a guy in Yemen with a drone-launched Hellfire missile, we can enforce our tax code.

[Barrister]

I started to post something similar to grumbles early on but apparently the US, unlike Canada, does tax gifts.

So if you are rich enough, you just go to Canada or wherever and take care of it that way.  Only the middle classes would have their estates taxed.  You know, like how most of this stuff tends to go.

I'm sure you know that US citizens get taxed on their income anywhere in the world.

[derspiess]

I started to post something similar to grumbles early on but apparently the US, unlike Canada, does tax gifts.

So if you are rich enough, you just go to Canada or wherever and take care of it that way.  Only the middle classes would have their estates taxed.  You know, like how most of this stuff tends to go.

I'm sure you know that US citizens get taxed on their income anywhere in the world.

Yes, of course we do

[Norgy]

Norway has a nice little out for companies: The Norwegian Foreign Company, which you can register. The pros: No taxes for the first three financial years, and no taxes until you turn a profit. The cons? No idea. I pay my taxes gladly. Now that I am sober, I am sure Norway needs my income tax more than ever, after I took away 10 % of the indirect taxes.

[MadImmortalMan]

Estate tax is a very good thing when used on very large estates, IMO. I just hate it for smallholders. In that case, it's not a leveler, it exacerbates the rich/poor gap. Even in cases where the beneficiaries get an ok living from it, so what. That's one more job someone else can have. What's the point in taking away their coffee shop and making them work for Starbucks instead? Society gets no benefit from that.

[crazy canuck]

I am pretty sure the Americans have their fair share of ways to avoid the tax.

Trying to fool the IRS is a dangerous game.  They can destroy you in many nefarious ways.

Tax avoidance is legal. 

[grumbler]

Estate tax is a very good thing when used on very large estates, IMO. I just hate it for smallholders. In that case, it's not a leveler, it exacerbates the rich/poor gap. Even in cases where the beneficiaries get an ok living from it, so what. That's one more job someone else can have. What's the point in taking away their coffee shop and making them work for Starbucks instead? Society gets no benefit from that.

No one is taking away anyone's coffee shop.  Billy and Susie have never owned the shop, and Bob and Sally, who used to own it, are dead.

Billy and Susie can choose to either sell the shop for $2 million and pocket their $500k apiece, or they can borrow $1 million and, combined with their prospective shares of the estate, buy the shop from the estate.

There is the risk that the bank will foreclose on them if they don't make their payments, and the bank will then take away their shop and make them work for Starbucks, but bankruptcy laws actually serve society well.  Bob and Sally also lived with this risk.

[MadImmortalMan]

Also, something like 35 or 40 percent of the single-family homes in my city are currently owned by hedge funds. I'm not blaming that on inheritance, but it's just one more thing to not do if we don't have to.

[MadImmortalMan]

Estate tax is a very good thing when used on very large estates, IMO. I just hate it for smallholders. In that case, it's not a leveler, it exacerbates the rich/poor gap. Even in cases where the beneficiaries get an ok living from it, so what. That's one more job someone else can have. What's the point in taking away their coffee shop and making them work for Starbucks instead? Society gets no benefit from that.

No one is taking away anyone's coffee shop.  Billy and Susie have never owned the shop, and Bob and Sally, who used to own it, are dead.

Billy and Susie can choose to either sell the shop for $2 million and pocket their $500k apiece, or they can borrow $1 million and, combined with their prospective shares of the estate, buy the shop from the estate.

There is the risk that the bank will foreclose on them if they don't make their payments, and the bank will then take away their shop and make them work for Starbucks, but bankruptcy laws actually serve society well.  Bob and Sally also lived with this risk.

There's always that risk. Why add more? Hell, they might not even want the shop. But if they do, we should let them have it. Society would get more taxes in the long run if they are successful anyway.

[grumbler]

There's always that risk. Why add more? Hell, they might not even want the shop. But if they do, we should let them have it. Society would get more taxes in the long run if they are successful anyway.

I don't understand the question.  Are you asking why societies collect taxes?  Are you suggesting that, instead of collecting taxes, "we should let" people just keep their money?  That society will get more taxes in the long run if we don't collect taxes?

That corner coffee store will be owned by someone, if not by Billy and Susie.  Whoever that someone is will have a mortgage and will pay taxes.  I see no reason to gift the store to Billy and Susie.  If Bob and Sally wanted them to have it, they should have sold or gifted it to them (in which case other applicable taxes would be paid and society comes out ahead).

[grumbler]

Also, something like 35 or 40 percent of the single-family homes in my city are currently owned by hedge funds. I'm not blaming that on inheritance, but it's just one more thing to not do if we don't have to.

  Also, something like 18 inches of rain fell in my town over the last month.  I'm not blaming that on insufficient inheritance taxes, but why not implement a 100% inheritance tax to be sure?

[Admiral Yi]

Also, something like 35 or 40 percent of the single-family homes in my city are currently owned by hedge funds. I'm not blaming that on inheritance, but it's just one more thing to not do if we don't have to.

I don't really see what this has to do with anything.

[MadImmortalMan]

There's always that risk. Why add more? Hell, they might not even want the shop. But if they do, we should let them have it. Society would get more taxes in the long run if they are successful anyway.

I don't understand the question.  Are you asking why societies collect taxes?  Are you suggesting that, instead of collecting taxes, "we should let" people just keep their money?  That society will get more taxes in the long run if we don't collect taxes?

That corner coffee store will be owned by someone, if not by Billy and Susie.  Whoever that someone is will have a mortgage and will pay taxes.  I see no reason to gift the store to Billy and Susie.  If Bob and Sally wanted them to have it, they should have sold or gifted it to them (in which case other applicable taxes would be paid and society comes out ahead).

If Billy and Susie keep the shop, they will pay income taxes and sales taxes just like mom and pop did while they operate the business. If Billy and Susie sell the shop, they will pay tax on the sale of capital assets. An extra tax in this case is simply not required. We'll get money from Billy and Susie no matter what they do.

You aren't gifting anything since the store isn't yours to gift.

[grumbler]

If Billy and Susie keep the shop, they will pay income taxes and sales taxes just like mom and pop did while they operate the business. If Billy and Susie sell the shop, they will pay tax on the sale of capital assets. An extra tax in this case is simply not required. We'll get money from Billy and Susie no matter what they do.

Whoever runs the shop will pay income taxes and sales taxes and whatnot.  If Billy and Susie, or anyone else, sells the shop, they will pay capital gains taxes.  Since the government is getting money from the estate under my proposal, though, all of those federal tax burdens will be less because the federal government will have to raise less money outside the estate tax regime.

You aren't gifting anything since the store isn't yours to gift.

It is no-one's to gift.  It's now part of an estate, and no one owns an estate. Even the executor can't just give away assets of the estate.